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Pump salary into superannuation?

Pump salary into superannuation?

Old Feb 23rd 2015, 1:54 am
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Default Pump salary into superannuation?

Hello all, I'm a newbie, so please be gentle!

I'm currently in Oz on a 417, about to go onto a 457, but plan to return to the UK in a couple of years. By plan, I mean we are going, no doubt about it. Because of this, we are saving hard, but does it make more sense to pump more of my salary into my super? I think you pay 15% tax on super up to $50k, against the 30+% on salary, so would I be right in thinking I'd be better off throwing more into the super? I've heard that a lot of Australians when approaching retirement try and funnel as much in as possible, and I'm relatively in the same position (whereby I plan to taking my super out in a year or two).

Anyone know anything about this or help?

Apologies if there is already a thread on this, I had a search but couldn't find anything.

Cheers!
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Old Feb 23rd 2015, 3:55 am
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Default Re: Pump salary into superannuation?

You need to consider the fact that you will be taxed when you take your Super out in two years (only tax-free withdrawals after your preservation age (usually 60 years old). Not 100% sure of the tax rate although I believe it is 38% for non-residents (read this thread http://britishexpats.com/forum/movin...ayment-843458/)

This may mean that you end up with less than you imagine. Might be worth a chat with an accountant familiar with 457 visas.

Best of luck.
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Old Feb 23rd 2015, 4:02 am
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Default Re: Pump salary into superannuation?

Just seen the withdrawal tax rate is 35-38% - see https://www.ato.gov.au/Rates/Key-sup..._sum_tax_table

Scroll down to the DASP table at the bottom.

Also, concessional contributions are capped at $30K (not $50K) for anyone under 59.

Last edited by goldchoccycoin; Feb 23rd 2015 at 5:26 am. Reason: added more info
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Old Feb 23rd 2015, 7:39 am
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Default Re: Pump salary into superannuation?

Originally Posted by goldchoccycoin
Just seen the withdrawal tax rate is 35-38% - see https://www.ato.gov.au/Rates/Key-sup..._sum_tax_table

Scroll down to the DASP table at the bottom.

Also, concessional contributions are capped at $30K (not $50K) for anyone under 59.

And also don't forget that your super investment may not perform as well as you hope - you could end up losing money as a lot of super funds seem to.


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Old Feb 25th 2015, 7:48 pm
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Default Re: Pump salary into superannuation?

Resoundingly no. Because of the 35% tax when you withdraw you'll end up paying more tax overall.

oops just seen it's gone up to 38% from this year, definitely not worth it.
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